Bipartisan South Korean Lawmakers Call on Gov’t to Ease Crypto, Blockchain Regulation

A cross-party group of South Korean lawmakers have reportedly called on the government to ease regulation of cryptocurrencies and blockchain technology. The news was reported by local English-language newspaper the Korea Herald on April 7.

Notwithstanding the ruling Democratic Party’s broad agenda of deregulation, the lawmakers claim the Moon Jae-in administration is pursuing measures that stifle and hamper growth of the nascent industry. They reportedly claim the country’s financial regulator, the Financial Services Commission, has taken an unduly conservative stance toward easing regulation of the sector.

In a speech on Friday during the 2019 Deconomy Conference at the National Assembly, Rep. Min Byung-doo of the Democratic Party reportedly stated that:

“The government said it would lower regulation barriers, but cryptocurrency and blockchain are not subject (to such a move), which is a contradiction. It is now time to review previous regulations and ease them according to needs.”

Min, who chairs the parliamentary National Policy Committee, reportedly pledged to raise the matter of crypto deregulation with president Moon, noting he had been consulting with high-level presidential aides to that end.

Also appearing before the National Assembly, Ethereum (ETH) co-founder Vitalik Buterin is said to have echoed these bipartisan calls on the government to drop its counter-productive handling of the industry. Financial news outlet Fxstreet reports he argued that the Korean government cannot foster blockchain technology and yet prohibit crypto assets, as the two are inextricable.

As previously reported, Song Hee-kyong — a representative of the opposition Liberty Korea Party and co-president of the 4th Industry Forum of the National Assembly — has for his part proposed a revision of existing frameworks to provide robust support for the blockchain industry.

The Korea Herald cites further details of Song’s comments before the National Assembly, where he reportedly stated:

“Although many customers rely on blockchain for a technological breakthrough, they suffer from lack of systemic support. The government’s vision of promoting the blockchain industry is nothing but talk.”

South Korea banned initial coin offerings (ICOs) in September 2018, claiming that the practice of raising funds through the issuance of cryptocurrency tokens was almost a gamble.

This January, the FSC resolved to keep the ICO ban, and in early March, the country’s Supreme Prosecutors' Office established a dedicated task force to fight crypto-related crimes.

The government has nonetheless said it will triple its blockchain budget for 2019 as compared with the previous year, and has to date pursued numerous blockchain initiatives at local and state levels. This February, the Liberty Korea Party pledged to promote blockchain across multiple fields, isolating it as one of the key technologies of the fourth industrial revolution.